Fifty years ago, counterfeiting was a rare art practiced by a small number of skilled engravers using esoteric equipment. Today, counterfeiting is a rampant problem practiced by thousands of criminals using ubiquitous computer equipment.
Statistics from the U.S. Secret Service illustrate the magnitude of the problem in the United States. In a recent report, the Secret Service stated:                The amount of counterfeit currency passed in the United States over the last three fiscal years has remained fairly consistent; however, 1998 has seen a significant increase, largely due to inkjet produced counterfeits. Inkjet produced counterfeit currency comprised only 0.5% of the total counterfeit currency passed in fiscal year 1995. In comparison, 19% of the total counterfeit currency passed in the United States during fiscal year 1997 was inkjet produced, and 43% of the counterfeit currency passed through August 1998 has been ink jet counterfeit currency.        This trend is attributed to rapid improvements in technology, and the ever-increasing availability and affordability of scanners, high-resolution inkjet and other output devices, and computer systems. Digital counterfeiting is likely to continue to increase as the capabilities of systems and devices continue to improve, and as these capabilities become more readily understood by the criminal element.        
Accompanying the Secret Service report was a table identifying the number of domestic counterfeiting plants raided, by type. Again, the explosive growth of inkjet counterfeiting is evident:
FY98Type of Counterfeiting PlantFY95FY96FY97(through July)Offset Counterfeiting60292310Toner-Based Counterfeiting59628747Inkjet-Based Counterfeiting29101321477
The problem is not limited to the United States; statistics from other countries show the above-detailed trends are worldwide.
Various means have been deployed over the years to deter the counterfeiting of banknotes and similar financial instruments. One is to incorporate design features in banknotes that are difficult to replicate. Another is to equip color photocopiers with the capability to recognize banknotes. If such a photocopier is presented with a banknote for duplication, copying is disabled or impaired.
Yet another approach is for color photocopiers to imperceptibly write their serial number on all output sheets, e.g. using small, light yellow lettering. (Such an arrangement is shown, e.g., in European laid-open application EP 554,115 and in U.S. Pat. No. 5,557,742.) While unknown to most of the public, the majority of color photocopiers employ this, or similar means, to mark all output copies with covert tracing data.
The inclusion of covert tracing data in all printed output from color photocopiers (and some color printers) brings into play the balancing of law enforcement needs versus the widely recognized users' rights of privacy and freedom of expression. Unbounded use of such covert marking techniques can raise the spectre of an Orwellian “Big Brother.”
In accordance with a preferred embodiment of the present invention, tracer data is selectively generated to assist law enforcement agencies in prosecuting counterfeiters. However, instead of rotely incorporating such data into all printed output, it is secretly stored in the counterfeiter's computer. If the computer is later searched or seized, the tracer data can be recovered and employed as evidence of the computer's use in counterfeiting.
The foregoing and additional features and advantages of the present invention will be more readily apparent from the following detailed description, which proceeds with reference to the accompanying drawings.